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You can use the fifo method or the weighted average base cost method but must stick to that method.
If you elect to use the fifo method and cannot buy all the shares on the same day at the same price due to volume,
you can add up all the share costs (Due From You) together and divide it by the amount of shares. This will give you a weighted average base cost for your shares bought for that day at cost.
Now if after a year you add more then do the same calculation. Now you have 2 batches of shares of the same stock at at 2 different base costs.
If you sell, then you must first sell the ones from your first batch. If the first batch is 3 years or older then you will pay CGT less the R30k exclusion. If not, you might have to add all your gains to your other income and pay tax at your normal margin.
I prefer the weighted average method as it is less paper work for me.
If you elect to use the fifo method and cannot buy all the shares on the same day at the same price due to volume,
you can add up all the share costs (Due From You) together and divide it by the amount of shares. This will give you a weighted average base cost for your shares bought for that day at cost.
Now if after a year you add more then do the same calculation. Now you have 2 batches of shares of the same stock at at 2 different base costs.
If you sell, then you must first sell the ones from your first batch. If the first batch is 3 years or older then you will pay CGT less the R30k exclusion. If not, you might have to add all your gains to your other income and pay tax at your normal margin.
I prefer the weighted average method as it is less paper work for me.
